Monday, April 14, 2014

Vail Resorts Offers to Purchase Park City Mountain Resort Amid Lawsuit

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THE NEWS

A buyout offer from Vail Resorts to purchase Park City Mountain Resort amid the ongoing lawsuit between PCMR and Talisker Land Holdings, LLC, is dominating Utah's ski industry news.

According to an article in The Park City Record, authored by Jay Hamburger, "Vail Resorts on Tuesday offered to purchase the Park City Mountain Resort base area and parking lots, a buyout option that could settle the lawsuit between PCMR and Talisker Land Holding, LLC."

Talisker owns the land where much of the lower resort area is located, and Park City Mountain Resort, which leases the land, is in jeopardy of losing their lease.  Hence, the lawsuit.  According the the Record article, Vail Resorts is overseeing the Talisker side of the lawsuit due to the firm's agreement to lease and operate the Canyons Resort, also owned by Talisker.

Hamburger states, "the offer was made in a five-page letter from Vail Resorts CEO Rob Katz to John Cumming, who is the CEO of PCMR parent Powder Corporation.  The letter was released midday Tuesday.  Katz covered a range of topics in the letter, including the lawsuit, Vail Resorts' desire for negotiations starting last summer, access to the disputed terrain, and the fate of PCMR's employees."

An excerpt from Katz' letter, which illuminates the basics of the dispute and lawsuit between Park City Mountain Resort and Talisker, follows.

"I think it's important to provide some context as to how we both find ourselves here today.  For many years, PCMR leased substantially all of its ski terrain from Talisker Corporation.  The lease provided PCMR a very favorable lease rate (press reports indicated only $150,000 per year.)  The lease was coming due on April 30, 2011, but it allowed PCMR to renew for an additional 20 years if PCMR provided written notice to Talisker by March 1, 2011.  As you know, PCMR did not provide timely written notice to Talisker.  In December 2012, Talisker informed PCMR that PCMR had not appropriately renewed its lease.  PCMR disagreed that the lease had ended.  Talisker offered PCMR a new lease with more expensive terms.  PCMR declined to take Talisker's offer and filed a lawsuit against Talisker.  More than a year after PCMR refused to pay Talikser's new rent request and then sued Talisker, Talisker secured a new tenant and new economic terms for the land, from companies associated with Vail Resorts in conjunction with leasing the Canyons to Vail Resort."

"While there has been much emotion and drama regarding these events, what transpired is relatively simple: a landlord believed that its tenant's lease had expired and wanted higher rent.  The tenant refused to pay and sued the landlord, so the landlord found a new tenant."

Again, there are numerous topics that Katz touches on in the letter to Cummings, but he makes it abundantly clear that under a number of different scenarios, Vail Resorts intends to operate the Park City ski resort.  The implications of this development for the Park City community are numerous and varied...and will also have a significant impact on the overall Utah and western US ski industries. An interconnect between the resorts surrounding Park City and those in Little and Big Cottonwood Canyons is under serious consideration, and connecting the Canyons and Park City would require only one lift.

It's hard to imagine that Vail Resorts' growing role in the Utah ski industry won't have a noticeable impact on resort real estate, particularly in light of the multi-resort season passes that all Vail resorts offer.  More skiers and riders experiencing Utah's relatively uncrowded slopes and bountiful "greatest snow on earth" should mean more property buyers.

Wolf Mountain to name?

In other Utah resort news, the new owners of Wolf Mountain ski resort in the Ogden Valley (sale reported in this blog/March 2014), are rumored to be considering changing the resort's name back to Nordic Valley, which is the name the ski mountain was known by for years.